While "to wank" means "to masturbate", the term "wanker" is seldom if ever used in British slang to denote "one who wanks". It is quite wrong to infer from somebody's being a wanker that they in fact wank (and vice versa), but of course, fair to assume they do in any case. Herein lies the genius of the insult: if you call someone a wanker, it's probably true, but only literally.

I suppose it all originates from our repressed Victorian sexualities, from back when everybody thought they were the only ones to suffer the secret shame of being an actual wanker.

Most children these days learn the word "wanker" long before they learn its literal meaning.

You're such a wanker.
Oh gosh! How did you know?

He lost both of his hands in a childhood kiting accident.
What a wanker!

1) Someone who loves themselves so much that masturbation isn't enough self-love for them, so they publicise their imaginary greatness by appearing on reality TV shows, or failing that, add entries to definition websites describing people with their name as somehow better than everyone else. See also: narcissist.

2) Basically the same as 1) above but a narcissist who, having had their pride bruised by someone, decides it is a mature and reasonable course of action to define aforementioned person on a definition website with details of said infidelity plus various fabrications about their sexual and/or culinary desires. Someone who publicly blames their own inadequacies on someone else.

I was on Urban Dictionary last night voting on the latest definitions, and I couldn't believe how many wankers there were trying to big themselves up or put someone down.